How to succeed in business with the right ERP system metrics (Part 1)
A disappointing number of IT projects, from full-blown ERP system implementations to adding the newest, hottest application, result in little if any quantifiable benefits. One frequent reason for this is that they were undertaken as IT projects in the first place, rather than as business initiatives that happened to employ technology. The difference isn’t nuanced. It’s fundamental. An enterprise’s needs, and responses to those needs, must be based on clear business requirements, operational exigencies and strategic initiatives near and dear to senior management. Technology for technology’s sake, on the other hand, is essentially tactical, often lacking clear business objectives and bereft of wide support outside the IT organization. To achieve success in ERP system implementations, upgrades and expansions, remember to always ask yourself first, “what high-level business improvements do we seek? “ and then “what role can technology play in making those improvements achievable?”
This results-oriented mindset focuses on indentifying, measuring and ensuring tangible business value. Rather than flying at 40,000 feet, where business cases and cost-benefit analyses often level off, a results-oriented approach works closer to ground level, breaking high level benefits into discrete steps with specific objectives. The emphasis is on establishing metrics for improvement and measuring attainment after implementation, then fine-tuning and adjusting to ensure the project does what it was intended to do.
ERP system success begins with project inception and continues beyond implementation and even the “go live” date. In roughly chronological order, these are activities that can contribute to a business-driven, results-oriented ERP system implementation.
Establish a business case. Start with what you are trying to achieve and why. Fundamentally, a technological implementation is about change. What are you trying to change? Why? What will your world look like after changes are made? How will this benefit the organization? Be specific. Establish business metrics. Now identify the information technology costs required to bring this change about. What should the ROI be on these investments? How will we measure this ROI?
Embrace change management. It’s relatively straightforward to change hardware and software. Changing people is a lot more difficult. Early in the process you need to make a comprehensive change management cultural assessment. What departments will be most highly impacted by planned changes? Where will pockets of resistance reside? What cultural obstacles will need to be surmounted? How do you preserve the cultural strengths while wiping away ossification and inefficiencies? Cultural change takes time. The earlier you start, the better.